Asian Session Forex Recap – Oct. 12, 2015

  • Japanese, US, and Canadian traders out on a holiday
  • IMF head Lagarde: Keep rates low or risk a market crash
  • Japanese gov’t plans to cut corporate tax rate in 2017
  • BOE MPC member Weale’s testimony coming up

The forex market seems to have had a case of the Monday blues, as the lack of liquidity kept most pairs in a lazy mood. Banks in Japan, the U.S. and Canada are closed on a holiday, but there are still a few catalysts lined up.

Over the weekend, the IMF meetings concluded with head honcho Christine Lagarde urging central banks to keep interest rates low in order to reduce the risk of another market crash. Apart from highlighting the potential threats that higher borrowing costs from the U.S. and the U.K. might pose, she also encouraged Japan and the euro zone to carry on with their easing programs in order to support global growth.

In addition, the IMF expressed its support for the Japanese government’s plans to reduce the corporate tax rate to less than 30% in 2017. This way, local companies can retain their competitiveness in the international scene, keeping demand and production supported.

But since that’s still a long way off, most yen pairs stayed safely inside their forex ranges for now. USD/JPY is cruising above the 120.00 mark (-0.03%), EUR/JPY is holding on to 136.60 (+0.07%), GBP/JPY is up 23 pips to 184.16 (+0.13%), and AUD/JPY is keeping is head above 88.00 (-0.07%).

Pound forex pairs could be treated to an extra dose of volatility in the upcoming London trading session, as BOE monetary policy committee member Martin Weale is set to give a testimony. He’s usually one of the more hawkish policymakers, as he has voted to hike interest rates in the past, so a shift in his tone to a more cautious one might mean losses for the British currency. On the other hand, emphasis on this upbeat assessment and outlook for the economy could allow the pound to extend its rally.

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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